What separates the rich from the poor?
The former tend to invest in the stock market. The majority of America’s stock value is confined to the wealthy, with 92% of the top 10% of Americans holding stocks. It shouldn’t come as a surprise that the wealthier you are the more likely you are to hold stock.
Before investing your money, it’s important to do your research to ensure you make intelligent financial decisions.
Let’s take a look at different ways to build wealth by utilizing stock alerts so you can trade the markets successfully.
Why are Stock Alerts Important?
Setting stock alerts enables you to keep your finger on the pulse of the markets. Whether you’re day trading or investing long term, market alerts can help you to know when to buy and when to sell.
They’re fully customizable and there are numerous services offering stock alerts and other types of analysis.
Furthermore, stock alerts can help you to spot trouble before it’s too late. With stock market corrections occurring, on average, once every 1.84 years, keeping a close eye on your investments is what separates the winners from the losers.
We recommend checking out this review of Mindful Trader for an introduction to stock alerts. Now, here’s what you need to know about integrating stock alerts into your investment portfolio.
- Trigger Target Prices
With so many alerts, it can be difficult to know which ones are relevant to you. Perhaps the most important is the target price alert.
Whenever an investment asset hits a set high/low, you’ll receive an alert. This can help you to know when to buy and when to sell. Letting your assets drift without monitoring is dangerous and could lead to you sustaining major losses.
For more information on setting target price triggers, read through this Trade Ideas review.
- Percentage Change Alert
Stocks usually don’t spike or drop through the floor without any prior warning. Wealthy investors always identify relatively big moves in advance of them happening.
A percentage change alert will notify you when a specific stock moves beyond the parameters you set.
For example, if your favorite dividend stock rarely moves by more than 1% in either direction during trading hours, you could set an alert for a 2% move. A larger-than-average move could indicate something significant is brewing.
This alert can help you to be a proactive trader, rather than a reactive one.
- Track the Exponential Moving Average (EMA)
Do you want to become a more in-depth investor? For those who like using technical analysis, an exponential moving average alert is vital.
Knowing when the EMA crosses its 20, 50, or 200-day limit can be useful for monitoring current and upcoming trends.
Whenever an EMA crosses a limit in one direction or the other, it can throw up buy and sell signals. All successful stock traders keep track of the EMA.
- Follow the 52-Week High/Low
The final stock alert we recommend setting is the 52-week high/low. Whenever a price falls below its 52-week low or its 52-week high, investors sit up and take notice. It’s a psychological barrier that when crossed can lead to action in the markets.
If you’re investing in the medium term, this alert can show you whether you need to get in or get out.
For more information on this more technical alert, read this TrendSpider review.
What Should You Take from Stock Alerts?
The investing strategy you should adopt depends entirely on your goals. For an investor saving for retirement via an IRA, does it matter what the EMA is? Likely not because you’re in this for the long haul with conservative, consistent stocks.
On the other hand, if you’re trading penny stocks then these alerts become infinitely more important.
There are also other alerts not specified in this guide, but they are far more technical and pertain to specific trading strategies. For the average investor, these four stock alerts are more than enough to be getting on with.
When trading, stock alerts are merely an indicator rather than a command. Just because a stock momentarily crosses its 52-week high, for example, doesn’t indicate a boom period for that stock. You shouldn’t take any alert as gospel. Instead, figure it into your broader analysis before making a final decision.
Final Thoughts
The numbers are clear. The top 1% of Americans control 38% of all accounts that hold stocks. If you want to be wealthy, you need to pay attention to the stock market.
Does this mean you need to hold direct ownership over your stocks? Not necessarily, but for those who want to be more active in the markets, it’s essential to learn about the different ways of analyzing stocks and current market trends.
Mastering these four stock alerts can help you to build wealth and solidify your family’s financial prospects.
